UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||||||||||||||
For the quarterly period ended: March 31, 2013
or
| o | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||||||||||||||||
For the transition period from__________to__________
Commission File Number: 001-33715
OKANA VENTURES, INC.
(Exact name of registrant as specified in its charter)
| Nevada | 20-2881151 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
Moliere No. 222, Torre de Oficinas, Col. Los Morales Polanco, Delgacion Miguel Hidalgo, Mexico City, Mexico | N/A | |
| (Address of principal executive offices) | (Zip Code) |
775-636-6986
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x YES o NO
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x YES o NO
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | o | Accelerated filer | o |
| Non-accelerated filer | o (Do not check if a smaller reporting company) | Smaller reporting company | x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. x YES o NO
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
3,525,000 common shares issued and outstanding as of May 9, 2013.
PART I — FINANCIAL INFORMATION
ITEM 1 – FINANCIAL STATEMENTS
| Page(s) | ||||
| Unaudited Balance Sheets as of March 31, 2013 and December 31, 2012 | F-1 | |||
| Unaudited Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2013 and 2012 and the Period from May 9, 2005 (Inception) through March 31, 2013 | F-2 | |||
| Unaudited Statements of Cash Flows for the Three Months Ended March 31, 2013 and 2012 and the Period from May 9, 2005 (Inception) through March 31, 2013 | F-3 | |||
| Notes to Unaudited Financial Statements | F-4 | |||
2
| (AN EXPLORATION STAGE COMPANY) | ||||
| BALANCE SHEETS | ||||
| (UNAUDITED) |
| March 31, | December 31, | |||||||
| 2013 | 2012 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 7,305 | $ | 15,015 | ||||
| Total Current Assets | 7,305 | 15,015 | ||||||
| TOTAL ASSETS | $ | 7,305 | $ | 15,015 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| LIABILITIES | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 2,170 | $ | 5,573 | ||||
| Notes payable to stockholder | 113,905 | 113,905 | ||||||
| Total Current Liabilities | 116,075 | 119,478 | ||||||
| Total Liabilities | 116,075 | 119,478 | ||||||
| STOCKHOLDERS' DEFICIT | ||||||||
| Common stock, par value $0.0001, 100,000,000 shares authorized and | ||||||||
| 3,525,000 shares issued and outstanding | ||||||||
| at March 31, 2013 and December 31, 2012 | 352 | 352 | ||||||
| Additional paid-in capital | 149,157 | 147,454 | ||||||
| Deficit accumulated during the exploration stage | (256,080 | ) | (250,070 | ) | ||||
| Cumulative other comprehensive loss | (2,199 | ) | (2,199 | ) | ||||
| Total Stockholders' Deficit | (108,770 | ) | (104,463 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 7,305 | $ | 15,015 | ||||
The accompanying notes are an integral part of these unaudited financial statements.
F-1
| (AN EXPLORATION STAGE COMPANY) | |||||||
| STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | |||||||
| (UNAUDITED) |
| Three Months Ended | May 9, 2005 | |||||||||||
| March 31, | (Inception) to | |||||||||||
| 2013 | 2012 | March 31, 2013 | ||||||||||
| INCOME | $ | - | $ | - | $ | - | ||||||
| OPERATING EXPENSES | ||||||||||||
| Organizational expenses | - | - | 1,097 | |||||||||
| Mineral property costs | - | - | 52,540 | |||||||||
| Consulting | - | - | 1,200 | |||||||||
| Professional fees | 3,950 | 7,000 | 118,015 | |||||||||
| General and administrative | 357 | 3,381 | 59,113 | |||||||||
| Taxes and licenses | - | - | 375 | |||||||||
| Total Operating Expenses | 4,307 | 10,381 | 232,340 | |||||||||
| OTHER INCOME AND (EXPENSE) | ||||||||||||
| Miscellaneous consulting income | - | - | 7,224 | |||||||||
| Interest, net | (1,703 | ) | (1,763 | ) | (30,964 | ) | ||||||
| Total other income and (expense) | (1,703 | ) | (1,763 | ) | (23,740 | ) | ||||||
| NET LOSS APPLICABLE TO COMMON SHARES | $ | (6,010 | ) | $ | (12,144 | ) | $ | (256,080 | ) | |||
| Foreign currency translation adjustment | - | (401 | ) | (2,199 | ) | |||||||
| COMPREHENSIVE LOSS | $ | (6,010 | ) | $ | (12,545 | ) | $ | (258,279 | ) | |||
| NET LOSS PER SHARE - BASIC AND DILUTED | $ | (0.00 | ) | $ | (0.00 | ) | ||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED | 3,525,000 | 3,441,667 | ||||||||||
The accompanying notes are an integral part of these unaudited financial statements.
F-2
| (AN EXPLORATION STAGE COMPANY) | |||||
| STATEMENTS OF CASH FLOWS | |||||
| (UNAUDITED) |
| Three Months Ended | May 9, 2005 | |||||||||||
| March 31, | (Inception) to | |||||||||||
| 2013 | 2012 | March 31, 2013 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||
| Net loss | $ | (6,010 | ) | $ | (12,144 | ) | $ | (256,080 | ) | |||
| Adjustments to reconcile net loss to net cash | ||||||||||||
| used in operating activities | ||||||||||||
| Imputed interest expense - related party | 1,703 | 1,763 | 30,009 | |||||||||
| Changes in operating assets and liabilities | ||||||||||||
| Increase (decrease) in accounts payable and | ||||||||||||
| accrued expenses | (3,403 | ) | 1,550 | 2,170 | ||||||||
| Net cash used in operating activities | (7,710 | ) | (8,831 | ) | (223,901 | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||
| Sale of common stock | - | - | 119,500 | |||||||||
| Proceeds from notes payable to stockholders | - | - | 113,558 | |||||||||
| Net cash provided by financing activities | - | - | 233,058 | |||||||||
EFFECTS OF FOREIGN CURRENCYTRANSLATION ON CASH | - | - | (1,852 | ) | ||||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (7,710 | ) | (8,831 | ) | 7,305 | |||||||
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 15,015 | 18,766 | - | |||||||||
| CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | 7,305 | $ | 9,935 | $ | 7,305 | ||||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||||||
Cash paid for interest | $ | - | $ | - | $ | - | ||||||
| Cash paid for taxes | $ | - | $ | - | $ | - | ||||||
The accompanying notes are an integral part of these unaudited financial statements.
F-3
OKANA VENTURES, INC.
(AN EXPLORATION STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2013 AND 2012
(UNAUDITED)
NOTE 1- BASIS OF PRESENTATION
The accompanying unaudited financial statements of Okana Ventures, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's registration statement filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year 2012 as reported in Form 10-K, have been omitted.
NOTE 2 - GOING CONCERN
These financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has a working capital deficit of $108,770 and has accumulated deficit of $256,080 as of March 31, 2013. Further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with loans and/or private placement of common stock. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.
NOTE 3 - NOTES AND LOANS PAYABLE TO STOCKHOLDERS
As of March 31, 2013 and December 31, 2012, the Company had a total of $113,905 due to its sole director and officer. The amounts due are unsecured, bear no interest and are due on demand. The Company imputes simple interest at 6% per annum as interest expense with the related-party donated interest as additional paid-in capital. The Company recorded related-party interest of $1,703 during the three months ended March 31, 2013.
F-4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.
As used in this current report and unless otherwise indicated, the terms "we", "us", "our" and "our company" mean Okana Ventures, Inc.
History
Okana Ventures, Inc. was incorporated on May 9, 2005, in the State of Nevada. We have conducted limited exploration activities on two former properties, the Westmoreland Property and the Bradley Creek Property, both located in British Columbia, Canada. Based on the results of our exploration efforts on these properties we decided not to proceed with any further exploration and terminated all related agreements.
Current Business
We are presently in the process of searching for another mining property that is economically viable and still in its exploration stage. We cannot guarantee that a commercially viable mineral deposit exists in any mining property we may acquire until we are able to perform further exploration and a comprehensive evaluation determines if it has economic feasibility.
Results of Operations for the Three Months Ended March 31, 2013 and 2012
During the three months ended March 31, 2013 and 2012 we had no revenue.
3
Our net loss and comprehensive loss for the three months ended March 31, 2013 and 2012 for the respective items are summarized as follows:
| THREE MONTHS ENDED | ||||||||
| MARCH 31, | ||||||||
| 2013 | 2012 | |||||||
| Professional fees | $ | 3,950 | $ | 7,000 | ||||
| General and administrative | 357 | 3,381 | ||||||
| Interest expense | 1,703 | 1,763 | ||||||
| NET LOSS APPLICABLE TO COMMON SHARES | $ | (6,010 | ) | $ | (12,144 | ) | ||
| Foreign currency translation adjustment | - | (401 | ) | |||||
| COMPREHENSIVE LOSS | $ | (6,010 | ) | $ | (12,545 | ) | ||
From the three months ended March 31, 2012 to the three months ended March 31, 2013, accounting and auditors’ fees decreased from $7,000 to $3,950 mostly due to timing difference of the year end audits, office and administrative fees decreased from $3,381 to $357 due to our more streamlined operations in 2013, and interest expense decreased from $1,763 to $1,703 due to foreign currency translation we used in 2012 which is not required in 2013.
Liquidity and Financial Condition
Working Capital
At March 31, 2013 the Company had cash balance of $7,305 and working capital deficit of $108,770. At December 31, 2012 the Company had cash balance of $15,015 and working capital deficit of $104,463.
Operating Activities
During the three months ended March 31, 2013 net cash used in operating activities was $7,710 compared to cash used in operating activities of $8,831 in the three months ended March 31, 2012.
Investing Activities
During the three months ended March 31, 2013 and 2012 we had no cash flows from investing activities.
Financing Activities
During the three months ended March 31, 2013 and 2012 we had no cash flows from financing activities.
Going Concern
Due to our being an exploration stage company and not having generated revenues, in the financial statements for the year ended December 31, 2012, our independent registered public accountant included an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. Our audited financial statements for the year ended December 31, 2012 contained additional note disclosures describing the circumstances that lead to this disclosure.
As of March 31, 2013, we had accumulated losses from inception of $256,080 and a working capital deficit of $108,770. The continuation of our business is dependent upon us raising additional financial support. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
4
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer who is also our principal financial officer, we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer who is also our principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective such that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, particularly during the period when this report was being prepared. However, because we have limited transactions which are all approved, carried out and reviewed by our director and officer, the impact of the limitations are not material.
Changes in internal control over financial reporting
There were no changes in our internal control over financial reporting during our most recent fiscal quarter that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.
5
ITEM 1. LEGAL PROCEEDINGS.
We know of no legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS
d) Exhibits
| Exhibit No. | Document Description | |
| 31.1* | Section 302 Certification of Chief Executive Officer and Chief Financial Officer | |
| 32.1* | Section 906 Certification of Chief Executive Officer and Chief Financial Officer |
| 101.INS ** | XBRL Instance Document | |
| 101.SCH ** | XBRL Taxonomy Extension Schema Document | |
| 101.CAL ** | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF ** | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB ** | XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE ** | XBRL Taxonomy Extension Presentation Linkbase Document |
_________________
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
6
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| OKANA VENTURES, INC. | |||
| (Registrant) | |||
| Dated: May 9, 2013 | By: | /s/ “Maria Peralta” | |
| Maria Peralta | |||
| President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) | |||
7